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The Partial 2019 Income Statement for Chili Tales is provided. Chili Tales Income Statement For the Year Ended December 31, 2019 $ 625,000 195,000 $ 430,000 Sales Revenue Cost of Goods Sold Gross Profit Operating expenses: Selling and Administrative Expenses Rent Expense Officer Compensation - Bob Advertising Expense Depreciation Expense (Book equals Tax) Charitable Contribution - Save the Manatee Life Insurance Premiums Operating Income Other Income (Expense): Dividend Income from Alphabet Inc. Interest Income from Cheeze Bank Loss on Sale of Investments Net Income 80,000 78,000 70,000 8,000 5,500 5,000 2,500 249,000 181,000 4,000 2,000 (1,000) 5,000 $ 186,000 A.) Calculate the company's Nonseparately Stated Income. Show you calculations and label each amount. Refer to Form 1120-S as a reference, since this is the same as Ordinary Income on page 1 of Form 1120-S. B.) Show a detailed allocation of Ordinary Income and each separately stated items of income and expense. A useful tool is Schedule K-1. Use labels for each dollar amount. Income/Expense Item Total Amount Bob's Allocation Larry's Allocation Junior's Allocation C.) Bob tells the other shareholders that they should each take a distribution of $25,000 on December 20th. Would you recommend they take equal distributions? How should the distributions be allocated if the TOTAL amount distributed was $75,000? The Partial 2019 Income Statement for Chili Tales is provided. Chili Tales Income Statement For the Year Ended December 31, 2019 $ 625,000 195,000 $ 430,000 Sales Revenue Cost of Goods Sold Gross Profit Operating expenses: Selling and Administrative Expenses Rent Expense Officer Compensation - Bob Advertising Expense Depreciation Expense (Book equals Tax) Charitable Contribution - Save the Manatee Life Insurance Premiums Operating Income Other Income (Expense): Dividend Income from Alphabet Inc. Interest Income from Cheeze Bank Loss on Sale of Investments Net Income 80,000 78,000 70,000 8,000 5,500 5,000 2,500 249,000 181,000 4,000 2,000 (1,000) 5,000 $ 186,000 A.) Calculate the company's Nonseparately Stated Income. Show you calculations and label each amount. Refer to Form 1120-S as a reference, since this is the same as Ordinary Income on page 1 of Form 1120-S. B.) Show a detailed allocation of Ordinary Income and each separately stated items of income and expense. A useful tool is Schedule K-1. Use labels for each dollar amount. Income/Expense Item Total Amount Bob's Allocation Larry's Allocation Junior's Allocation C.) Bob tells the other shareholders that they should each take a distribution of $25,000 on December 20th. Would you recommend they take equal distributions? How should the distributions be allocated if the TOTAL amount distributed was $75,000

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